Bitcoin fell to $63,030 after the US and Israeli attack on Iran triggered a risk-off chain across the market. From there, BTC rose to $74,000 during the day on March 4, a roughly 17% rebound.
At the time of writing, Bitcoin is trading at $73,613, up 7.7% in the past 24 hours. This move reversed much of the decline, but whether it holds or not depends on several levels and liquidity signals that on-chain data identifies as important.
To sustain the rally, BTC needs to turn the weekly closing price limit of $70,000 into support. Otherwise, $70,000 remains the overhead distribution band and the $60,000 to $69,000 demand zone is still below the actual bid.
Glassnode has set $70,000 as a short-term resistance line that BTC has repeatedly failed to break above on a weekly basis since early February.
The one-week to one-month holder cost base is close to $70,000, forming what Glassnode calls an overhead distribution zone, a ±2% range of $68,500 to $71,500, where recent buyers can become sellers once they reach breakeven or a small profit.
Beyond that, $75,000 emerges as a key gamma magnet in option positioning. The negative gamma of approximately $2.3 billion is concentrated in a $75,000 strike across maturities, with $1.8 billion for the March 27 maturity alone.
A net call premium of $14.5 million is trading at $75,000 over the next three months of expiration, with two-thirds of that amount accumulated over the past week.
This is not just a rough number. The option positioning gives us a liquidity and gravity level of $75,000. If the price is pulled there, there must be real spot demand behind it, otherwise it will be in the chop zone.
Below the current level, the support structure becomes thinner. The intraday low near $67,500 serves as the “failure to bounce” line. If BTC falls below that, the move risks being unwound.
Last week, Glassnode identified $60,000 to $69,000 as the main demand zone below, suggesting that’s where the real bid price will be if the bull market weakens.
Using a range of $63,030 to $74,000, keeping 70% of your bounce means keeping at least $70,709. If you keep 60%, you’ll keep $69,612. These thresholds almost perfectly match Glassnode’s $68,500 to $71,500 overhead distribution band.
If BTC stays above $70,700, the majority of the bounce is likely to hold. If we lose $69,600, the market has returned a meaningful portion and $70,000 returns to a role more like supply than support.
Demand is diluted
On-chain indicators show that buy-side demand remains weak despite the price recovery.
The 30-day simple moving average of realized gains fell from more than $1 billion per day to approximately $370 million per day, a contraction of 63%.
Glassnode interprets this as a decline in buy-side liquidity. A “hold the gain” setting requires a realized profit to stop and re-extend the contract, indicating that the buyer is willing to trade at a premium. Without it, the bounce will be in weak hands.
The supply as a percentage of profits is about 57%, below the minus one standard deviation threshold of nearly 60%. Glassnode compares this stressful regime to the early stages of the bear phase in May 2022 and November 2018.
For the bull market to continue, supply as a percentage of profits must return to 60%, continue to trend upward, and show a break from the stress regime.
Coinbase leads spot liquidity, ETF flows stabilize
Spot flow data reveals a delicate situation.
Selling pressure has eased in recent days. Coinbase’s spot cumulative volume delta has started to recover, indicating early bid-side activity.
However, while flows on Binance and general exchanges remain weak, Glassnode notes that they are “no longer declining at an accelerated rate.”
This bounce only holds if bid absorption expands beyond Coinbase. Otherwise, it will be a local rescue rebound rather than a market-wide spot reversal. This pattern suggests that institutional investors or U.S.-based buyers are getting involved again, but the influx from international buyers and retailers has not yet followed.
The Bitcoin Spot ETF continued to experience outflows leading to declines, but the initial inflows reappeared and flows stabilized. There was a net inflow of $458.2 million on March 2, followed by $225.2 million on March 3, according to data from Farside Investors.
Glassnode emphasizes that while it is too early to confirm a permanent reversal, a continued recovery in inflows will provide meaningful spot support.
Supportive conditions include multiple days of net inflows and a 7-day average rising from negative. If the flow turns negative while the price remains below or near the $70,000 overhead band, reversal risk remains.
The stabilization is encouraging, but sustainability is more important than the initial turnaround.
Derivatives: Leverage flushed and $75,000 as a magnet.
Perpetual directional premiums continue to compress towards cycle lows, indicating prudent leverage and modest bullish conviction.
Glassnode sees this as a sign that leverage is being flushed, but also as a signal that leveraged bulls remain hesitant.
If healthy holds are maintained, premiums will stabilize and spot conditions will improve.
A weak hold is expected to see prices rise, mainly in derivatives, while spot remains weak. So far, the setup leans toward the former, de-leveraging rather than aggressively re-accumulating leverage.
Options positioning has changed dramatically since the February 28th low. The put/call ratio increased from 1.89 to 0.4, reflecting hedge unwinding and increased call activity. The skew has narrowed from the mid-20s to the low-10s, indicating that downside concerns have faded.
The $75,000 strike concentration is the key detail. Approximately $2.3 billion of negative gamma exists in its strike across maturities, with $1.8 billion concentrated on the March 27 maturity.
A net call premium of $14.5 million is trading at $75,000 over the next three months of expiration, with two-thirds of the premium accumulated over the past week.
As the price approaches $75,000, gamma concentration creates liquidity and gravitational effects. If actual spot demand is not corroborated, that level could become a chop zone rather than a breakout point.
What lasts and what breaks?
Three scenarios represent possibilities.
The first scenario occurs if BTC holds above $70,700 and begins to provide stronger spot and ETF support. In this case, the $70,000 level will flip to support and $75,000 will be the next magnetic test. A reversal will be confirmed if the weekly close exceeds $70,000.
If the second scenario plays out, BTC will fluctuate between $68,500 and $71,500, with weekly closes unable to exceed $70,000, and this move risks becoming a relief rally for overhead distributions. Realized profits need to be re-scaled, and spot bid absorption needs to be expanded beyond Coinbase to resolve this range higher.
Finally, the third scenario occurs if BTC loses its local bounce structure around $67,500 and $70,000 remains in overhead. The market is likely to reconsider the demand zone of $60,000 to $69,000 as the effective bid price. This marks a bounce failure rather than a hold.
The data points to a fragile recovery with pockets of strength, including improving Coinbase flows, stabilizing ETF inflows, and normalizing options skew.
But the broader tape remains unconvincing.
The $70,000 level is more than just a number; it’s the level at which recent buyers are making cost-based decisions, the level at which weekly closes have repeatedly failed, and the level at which the market will test whether this rally will follow through or fade into overhead supply.
The breadth of weekly closing prices and spot flows will answer that question in the coming days.
(Tag translation) Bitcoin
